About Form W-2G, Certain Gambling Winnings

Further clarification has been given recently in relation to land-based advertising of online gambling where the UKGC has stated that gambling operators cannot advertise their services without both making it clear in the product as advertised, and in reality, that betting with that particular operator is not available to those in Britain 8. The benefits of changing regulation so that gambling is regulated at the point of consumption rather than supply brings Britain into line with the approach of other European countries. Seeking out such jurisdictions and negotiating agreements would undoubtedly incur further cost - again something that the taxpayer would bear. Translating the land-based guidance to online advertising by making it clear that if the facilities are not available in Great Britain will help to some degree. Gambling income is almost always taxable income.

Is Gambling Income Taxable?

Seeking out such jurisdictions and negotiating agreements would undoubtedly incur further cost - again something that the taxpayer would bear. The legislative framework introduced by the Act was recently the subject of a High Court challenge by the Gibraltar Betting and Gaming Association GBGA , which claimed the new regime was 'unlawful because it is an illegitimate, disproportionate and discriminatory interference with the right to free movement of services guaranteed by Article 56 TFEU.

However, Justice Nicholas Green disagreed, rejecting the claim and concluding that the GBGA had not established that the new regime was unlawful under EU or domestic law, and it served a series of legitimate objectives.

He stated that remote gambling services are highly profitable for those that provide the service, but the financial benefit to the provider can be at the expense of the social welfare of the consumer and can bring about a high consequential social and economic clean-up cost for the State 7. He considered that if the Government could not lawfully move to a point of consumption regime, the prospect of any form of regulation of remote e-commerce becomes increasingly difficult.

Whilst one can understand the Government's financial rationale for switching the regulation and taxation of remote gambling in the UK to the point of consumption rather than supply, it remains to be seen how successful the new regime will be in practice and what level of enforcement action the UKGC will take against operators whom it considers to be breaching the new rules.

There are some grey areas which remain to be tested. For example, the question of whether blocking access by British consumers to websites of overseas' operators is sufficient to avoid committing the offence of unlawful advertising.

The UKGC says that the position is arguable, and that consumers can circumvent blocking measures. Further clarification has been given recently in relation to land-based advertising of online gambling where the UKGC has stated that gambling operators cannot advertise their services without both making it clear in the product as advertised, and in reality, that betting with that particular operator is not available to those in Britain 8.

Justice Green make it clear in his judgment that a an unlicensed operator whose services are capable of being used by customers in Great Britain will commit a criminal offence if it advertises its services in this jurisdiction and this will apply even if the operator has no intention of targeting British customers, but is not able effectively to block such customers accessing its services 9.

Translating the land-based guidance to online advertising by making it clear that if the facilities are not available in Great Britain will help to some degree. However, the bottom line is that, operators should ensure they have fully addressed the due diligence and technical challenges of making sure that consumers do not circumnavigate blocking measures. Operators should have clear policies and due diligence procedures in place to ensure they have a robust evidence trail in the event of an investigation by the UKGC.

Of some, albeit limited, comfort to operators is the fact that the Government has stated that it will watch and learn how the new regime operates in practice and if lacunae or flaws emerge it will consider strengthening the legislation Only time will tell. In gambling, the many must lose in order that the few may win Profits are the amounts due to an operator as stakes or for use of facilities it provides for remote gaming, less amounts paid out as winnings.

DCMS , June ,p9. DCMS , June , paragraph Posted by E-comlaw at 1: Powered by bp blog 5. Sports law news and information. Wednesday, November 19, The impact of the Gambling Licensing and Advertising Act The Gambling Licensing and Advertising Act has changed the way in which gambling is regulated in Great Britain from a point of supply to a point of consumption basis. Background to changes It is estimated that online gambling has a The Government's impetus for the changes was based on the fact that overseas based operators were not required to: In addition, it hopes to: Industry criticism Unsurprisingly, many gaming companies disagreed with the Government's perception that the previous system adversely affected British consumers and suggested that there was little concrete evidence in support of this.

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Apply for an ITIN. More In Forms and Instructions. The requirements for reporting and withholding depend on: New Regular and Backup Withholding Rates for Form W2-G Changes to acceptable identification that a person receiving winnings may present and new requirement to aggregate multiple wagers in a single parimutuel pool and multiple wagers where winning depends on the occurrence of the same event.